Photo of Steven Booth, Sodexo and Amos Curtis, Citi.

Refinements to Sodexo’s travel booking system has made some significant savings and provided it with detailed sources of data, delivering further finance department efficiencies.

A three-part travel solution provides massive savings across the business

The challenge

Sodexo is a globally decentralised organisation with a central travel account. It worked with three travel management companies (TMCs), which resulted in issues in reconciling data, especially in relation to hotel bookings – employee data and cost centre data was often incomplete. This required extensive manual reconciliation and back office work to allocate to correct cost centres.

The challenge was compounded by billing practices: 40% of spend was settled by bill-back, with the remainder paid by corporate credit card or personal cards. This limited visibility, as expenses were not submitted or paid according to a set timetable.

The solution

Sodexo moved to a single global TMC provider and at the same time decided to move to full bill-back using Citi’s Virtual Card Accounts for Travel (VCAT) to allow employee data to be captured and fed directly to the Conferma expense management system. Sodexo wrote to hotel chains to explain its move to a single TMC, the KDS online booking tool (OBT) and Citi’s payment mechanism.

In practice, the project required the implementation of a direct data feed into the Conferma expense management system, as part of the reporting from VCAT. It also involved the integration of VCAT into the OBT and the TMC.

The package delivers a choice of hotels displayed within the OBT, prioritisation in the system helping users to select the cheapest option. Sodexo is now looking to use VCAT for rail expenses. It is working with KDS to integrate data capture for this expense via their systems. As new spend commodities become available they will look to extend the usage of VCAT.

Best practice and innovation

This unique solution demonstrates a number of achievements. Employees no longer have to pay using a corporate or personal card, reducing pressure on them and making expenses more straightforward. VCAT and Conferma allows cost, cost centres and other data to be captured accurately at the point of requesting a virtual card. This reduces back office work such as reconciliation. Sodexo also obtains more accurate data (including booking versus cost data), enabling it to negotiate better rates with chains and drive down costs.

There has been a significant change in perception of the expenses team within Sodexo too. They were previously seen as simply processing expenses; now they are recognised as providing in-depth reports and insights that can help the business.

What’s more, VCAT has helped to redefine Sodexo’s travel policy and the processes that support it. The solution increased the use of the KDS online booking tool from 46% to 78% of transactions (with the remainder offline). Online bookings offer savings of approximately 20% to 30% on agency fees.

Sodexo is expecting to reach 85% online for hotel bookings. It also anticipates an overall US$1.8m cost saving from the solution, US$350,000 of which comes from hotel-related savings.

Cash flow management has improved. By moving to bill-back, it creates a set cycle and billing terms. This means data is sent to treasury to forecast outgoings one month in advance. The data goes directly to the expense management system. This will result in FTE savings by eliminating manual reconciliation and also allow resources to focus on value-add areas that will make a significant different to the business. In addition, data provided by the solution allows Sodexo to drill down and target segments or individuals to get best rates for preferred hotels. Once sufficient data is collected, Sodexo will be able to report on traveller behaviours.

Key benefits

• No pressure on employees to use personal cards.
• Data capture for deeper spend analysis/supplier negotiations.
• Payments seen as source of business insight.
• Helped redefine travel policy.
• Estimated US$1.8m cost saving.
• Cash flow management improvements.

Key learning points

As the solution involved input from a number of parties (TMC/Citibank/Conferma and Concur) it was beneficial at the start of the project for all parties to get together on one call/meeting to ensure we were all aligned and could openly discuss the requirements and challenges. These sessions were extremely beneficial and allowed us to move ahead with the project quickly.

As with most projects and change, communication is the key element to the success. We thought we had covered this by communicating the changes internally to our employees and travellers, however the one area we missed and quickly realised, was our communication to the hotels, in particular our preferred hotels. They were unaware of the change in process and as such hadn’t read the booking confirmations which detailed the new payment method.

Utilise the tools available. There are a number of tools now available to the traveller to ensure the process is as efficient as possible, this includes the Trippay mobile application provided by Conferma which provides details of the booking and the ability to present the payment card to the hotel on their mobile device. This helps to resolve any issues when it comes to settling the bill at the hotel.

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